What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-11-19 compared with 2024-11-20 · 189 added, 97 removed, 822 unchanged (26% of the section changed)

32 unchanged sentences

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions

and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

15 unchanged sentences

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the determination of total estimated costs at completion of the performance obligation and determination of total contract price.

These procedures also included, among others, evaluating and testing management’s process for determining the estimated total cost and revenue for a sample of contracts, which included (i) obtaining executed purchase orders and agreements, (ii) evaluating the appropriateness of the method to measure estimated total cost and revenue, (iii) testing the completeness and accuracy of the underlying data used by management, and (iv) evaluating the reasonableness of significant assumptions related to the total estimated costs at completion and liquidated damages used by management and considering the factors that can affect

the accuracy of those estimates.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the

determination of total estimated costs at completion of the performance obligation and determination of total contract price.

Evaluating the reasonableness of significant assumptions related to estimated total cost involved assessing management’s ability to reasonably estimate total costs to complete and liquidated damages by testing management’s process to evaluate the remaining costs related to the performance obligation and evaluating the timely identification of circumstances which may warrant a modification to the total estimated costs or liquidated damages.

15 unchanged sentences

Inventories 84,719 85,873

Income taxes receivable 61 100

Prepaid expenses 10,591 7,487

3 unchanged sentences

Operating lease assets, net 1,664 1,216

Goodwill and intangible assets, net 1,503 1,003

Goodwill 6,125 1,003

Intangible assets, net 6,138 500

Deferred income tax assets 33,440 27,246

45 unchanged sentences

Research and development expenses 11,008 9,427 6,220

Amortization of intangible assets 112 — —

Operating income 217,860 178,773 62,520

Other expenses (income):

Other income — — ( 2,285 )

Interest income, net ( 15,690 ) ( 17,315 ) ( 6,430 )

Income before income taxes 233,550 196,088 68,950

Income tax provision (benefit) 46,240 14,425 ( 3,894 )

Income tax provision 52,803 46,240 14,425

Net income $ 180,747 $ 149,848 $ 54,525

15 unchanged sentences

Foreign currency translation adjustments ( 2,598 ) 2,561 1,915

Gain (loss) on cash flow commodity hedge — 325 ( 325 )

Gain on cash flow commodity hedge — — 325

Postretirement benefit adjustment, net of tax ( 83 ) ( 13 ) ( 151 )

17 unchanged sentences

Dividends — — 141 ( 12,882 ) — — — ( 12,741 )

Loss on cash flow commodity hedge — — — — — — ( 325 ) ( 325 )

Gain on cash flow commodity hedge — — — — — — 325 325

Postretirement benefit adjustment, net of tax of $ 40

6 unchanged sentences

Dividends — — 438 ( 12,935 ) — — — ( 12,497 )

Gain on cash flow commodity hedge — — — — — — 325 325

Postretirement benefit adjustment, net of tax of $ 4

18 unchanged sentences

Net income $ 180,747 $ 149,848 $ 54,525

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation 6,871 8,606 9,358

Gain on sale of division — — ( 2,006 )

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 7,265 6,871 8,606

Stock-based compensation 4,635 4,747 4,599

Unrealized mark-to-market gain on derivative contracts ( 234 ) ( 326 ) —

Bad debt expense, net 278 ( 54 ) 162

Bad debt expense (recovery), net ( 3 ) 278 ( 54 )

Deferred income taxes ( 4,868 ) ( 7,474 ) ( 7,847 )

8 unchanged sentences

Other, net 1,606 ( 2,224 ) 999

Net cash provided by (used in) operating activities 108,661 182,553 ( 3,582 )

Net cash provided by operating activities 167,937 108,661 182,553

Investing Activities:

1 unchanged sentence

Maturities of short-term investments 53,537 33,107 14,748

Proceeds from sale of division — — 4,348

Cash paid for business acquisition, net of cash acquired ( 11,488 ) — —

Purchases of property, plant and equipment ( 13,149 ) ( 11,983 ) ( 7,819 )

1 unchanged sentence

Purchase of intangible assets — ( 250 ) —

Net cash provided by (used in) investing activities ( 21,874 ) ( 26,574 ) 6,465

Net cash used in investing activities ( 8,342 ) ( 21,874 ) ( 26,574 )

Financing Activities:

Payments on industrial development revenue bonds — — ( 400 )

Shares withheld in lieu of employee tax withholding ( 12,248 ) ( 6,599 ) ( 652 )

1 unchanged sentence

Net cash used in financing activities ( 25,117 ) ( 19,252 ) ( 13,059 )

Net increase (decrease) in cash and cash equivalents 67,535 142,920 ( 10,425 )

Net increase in cash and cash equivalents 134,478 67,535 142,920

Effect of exchange rate changes on cash and cash equivalents 930 1,921 1,001

12 unchanged sentences

Powell Canada Inc.;

and Powell Industries International, B.V.

and Powell Industries International Limited.

We are headquartered in Houston, Texas, and primarily serve the oil and gas and petrochemical markets, the electric utility market, and commercial and other industrial markets.

33 unchanged sentences

Fair Value of Financial Instruments

Financial instruments include cash, cash equivalents, short-term investments, receivables, deferred compensation, payables and debt obligations.

Financial instruments include cash, cash equivalents, short-term investments, receivables, deferred compensation, contingent future payments related to business acquisitions, payables and debt obligations.

Except as described below, due to the short-term nature of account receivables and account payables, their book values are representative of their fair values.

35 unchanged sentences

In addition, we estimate the useful lives of our property, plant and equipment and periodically review these estimates to determine whether these lives are appropriate.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets generally result from acquired businesses.

We account for business acquisitions by allocating the purchase price to tangible and intangible assets acquired and liabilities assumed at their fair values at the acquisition date;

the excess of the purchase price over the allocated amount is recorded as goodwill.

Goodwill is not amortized, but is evaluated for impairment at least annually.

An impairment exists when the carrying amount of goodwill exceeds its implied fair value.

Additional impairment assessments may be performed on an interim basis if we encounter events or changes in circumstances that would indicate, more likely than not, the carrying value of goodwill has been impaired.

In the evaluation of goodwill for impairment, we have the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value is less than its carrying value.

If, after completing such assessment, we determine it is more likely than not that the fair value is greater than its carrying value, no further testing is required.

If we conclude otherwise, or if we elect to perform a quantitative assessment, we then calculate the fair value and compare to the carrying value.

In performing the fair value assessment, management makes various judgments, estimates and assumptions, the most significant of which include the estimated future cash flows and discount rates.

If the carrying value exceeds the fair value, an impairment loss, not to exceed the carrying amount of goodwill, is recorded in the Consolidated Statements of Operations.

Other intangible assets include customer relationships, trademarks, purchased technology and order backlog, all of which are subject to amortization over their estimated remaining useful lives.

We evaluate other intangible assets for impairment when impairment indicators are present.

If the carrying value exceeds the fair value, an impairment loss is recorded in the Consolidated Statements of Operations.

In Fiscal 2025, we added $ 5.1 million of goodwill and $ 5.8 million of other finite-life intangible assets through the acquisition of Remsdaq Ltd.

Business Acquisition for additional information.

We account for income taxes under the asset and liability method, based on the income tax laws and rates in the countries in which operations are conducted, and income is earned.

19 unchanged sentences

We also have contracts to provide field service inspection, installation, commissioning, modification, and repair services, as well as retrofit and retrofill components for existing systems.

If the service contract terms give us the right to invoice the customer for an amount that corresponds directly with the value of our performance completed to date (i.e., a service contract in

which we bill a fixed amount for each hour of service provided), then we recognize revenue over time in each reporting period corresponding to the amount that we have the right to invoice.

If the service contract terms give us the right to invoice the customer for an amount that corresponds directly with the value of our performance completed to date (i.e., a service contract in which we bill a fixed amount for each hour of service provided), then we recognize revenue over time in each reporting period corresponding to the amount that we have the right to invoice.

Our performance obligations are satisfied as the work progresses.

34 unchanged sentences

We account for forfeitures as they occur, rather than estimate expected forfeitures.

Accounting Standards Updates and Disclosure Rules Issued but Not Yet Adopted

Recently Adopted Accounting Standards Update

In November 2023, the Financial Accounting Standard Board (FASB) issued Accounting Standards Update (ASU) 2023-07,

2 unchanged sentences

It also requires that public entities disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures in assessing segment performance and resource allocation.

Additionally, it requires that all existing annual disclosures about segment profit or loss and assets must be provided on an interim basis and clarifies that single

reportable segment entities are subject to the disclosure requirement under Topic 280 in its entirety.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years beginning after December 15, 2024.

Additionally, it requires that all existing annual disclosures about segment profit or loss and assets must be provided on an interim basis and clarifies that single reportable segment entities are subject to the disclosure requirement under Topic 280 in its entirety.

ASU 2023-07 was effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years beginning after December 15, 2024.

A public entity should apply ASU 2023-07 retrospectively to all prior periods presented in the financial statements.

Early adoption is permitted.

We are currently evaluating the impacts of the new standard.

Early adoption was permitted.

We have adopted the new standard with an effective date of October 1, 2024.

Segment Information for additional information.

Accounting Standards Updates and Disclosure Rules Issued but Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which enhances the transparency of income tax disclosures.

3 unchanged sentences

We are currently evaluating the impacts of the new standard.

In March 2024, the SEC adopted final rules designed to enhance and standardize disclosures related to the risks and impacts of climate-related matters.

The final rules require registrants to disclose certain climate-related information in registration statements and annual reports.

Such information relates to climate-related risks and risk management processes for, and governance and oversight activities of, such risks.

The final rules also include requirements to disclose the financial effects of severe weather events and other natural conditions in the audited financial statements.

In addition, larger registrants will be required to disclose information about greenhouse gas emissions, which will be subject to a phased-in assurance requirement.

These disclosure requirements were scheduled to be effective for the Company's fiscal year beginning October 1, 2025.

However, in April 2024, the SEC voluntarily stayed the final rules as a result of pending legal challenges.

We are currently evaluating the impacts of the final rules on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Reporting Comprehensive Income - Expense Disaggregation Disclosures , which requires additional qualitative and quantitative information about specific expense categories in the notes to financial statements for both interim and annual reporting periods.

In January 2025, the FASB further clarified the effective date for interim reporting periods.

This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impacts of the new standard.

Earnings Per Share

32 unchanged sentences

Depreciation expense was $ 7.2 million, $ 6.9 million and $ 8.6 million for fiscal years 2025, 2024, and 2023, respectively.

On July 1, 2024, we acquired land and buildings in Houston, Texas, for a total cash purchase price of approximately $ 5.6 million to help further facilitate executing the current backlog as well as planning for modest future volume growth.

In Fiscal 2025, the expansion and improvement project at our electrical products facility in Houston, Texas was completed and the incremental capacity has been placed into service.

Additionally, on August 15, 2025, we acquired land and buildings of $ 2.8 million related to the acquisition of Remsdaq.

In Fiscal 2024, we acquired land and buildings in Houston for a total cash purchase price of approximately $ 5.6 million to help further facilitate executing the current backlog as well as planning for modest future volume growth.

Accrued Product Warranty

44 unchanged sentences

Actual revenues and project costs may vary from previous estimates due to changes in a variety of factors.

The cost estimation process is based upon the professional knowledge and experience of our engineers, project managers and financial professionals.

The cost estimation process is based on the professional knowledge and experience of our engineers, project managers and financial professionals.

Factors that are considered in estimating the work to be completed and ultimate contract recovery include the availability and productivity of labor, the nature and complexity of the work to be performed, the availability of materials, and the effect of any delays on our project performance.

4 unchanged sentences

These changes in estimates resulted primarily from favorable project execution, reduced cost estimates and negotiations of variable consideration, discussed below, as well as revenue recognized from project cancellations and other changes in facts and circumstances during these periods.

Project cancellations increased gross profit by $ 2.2 million and $ 4.3 million, respectively, for the years ended September 30, 2024 and September 30, 2023.

Project cancellations increased gross profit by $ 4.6 million and $ 2.2 million, respectively, for the years ended September 30, 2025 and 2024.

Gross unfavorable changes in contract estimates were immaterial for the years ended September 30, 2025 and 2024.

25 unchanged sentences

During the year ended September 30, 2025, we recognized revenue of $ 261.2 million that was related to contract liabilities outstanding at September 30, 2024.

The timing of our invoice process is typically dependent on the completion of certain milestones and contract terms and subject to agreement by our customer.

The timing of our invoice process is typically dependent on the completion of certain milestones and contract terms and is subject to agreement by our customer.

Payment is typically expected within 30 days of invoice.

10 unchanged sentences

Canada 157,191 106,521 84,090

Europe 31,388 26,699 17,699

Middle East and Africa 27,440 13,440 14,998

Mexico, Central and South America 7,631 9,399 3,095

Europe 25,072 31,388 26,699

Asia/Pacific 9,283 6,850 6,188

Mexico, Central and South America 5,110 7,631 9,399

Total revenues by geographic destination $ 1,104,318 $ 1,012,356 $ 699,308

1 unchanged sentence

Oil and gas (excludes petrochemical) $ 406,565 $ 417,170 $ 273,117

Petrochemical 185,606 94,188 66,538

Electric utility 278,988 186,547 158,400

Commercial and other industrial 178,222 149,899 103,966

Petrochemical 151,166 185,606 94,188

Light rail traction power 41,264 22,019 28,112

1 unchanged sentence

Total revenues by market sector $ 1,104,318 $ 1,012,356 $ 699,308

Goodwill and Intangible Assets

In December 2023, we acquired intellectual property for a total consideration of $ 0.5 million, of which $ 250 thousand was paid in cash at the acquisition date.

The intellectual property is not yet subject to amortization.

Our intangible assets also include goodwill of $ 1.0 million, which is not being amortized.

Goodwill and Other Intangible Assets

Our intangible assets include goodwill of $ 6.1 million, which is not being amortized, and other intangible assets of $ 6.1 million being amortized over their estimated useful lives.

No impairment expense has been recorded for the last three fiscal years.

The changes in the carrying amount of goodwill for our single reporting segment are as follows (in thousands):

Balance at September 30, 2024 and 2023 $ 1,003

Goodwill related to Remsdaq acquisition (1)

Foreign currency translation adjustment ( 21 )

Balance at September 30, 2025 $ 6,125

(1) See Note P.

Business Acquisition for additional information.

Intangible asset balances, subject to amortization, at September 30, 2025 and 2024 consisted of the following (in thousands):

September 30, 2025 September 30, 2024

Weighted Average Remaining Useful Lives in Years Gross

Value Accumulated

Amortization Net

Value Accumulated

Amortization Net

Customer relationships 12 $ 2,202 $ ( 23 ) $ 2,179 $ — $ — $ —

Technologies 5 3,518 ( 76 ) 3,442 500 — 500

Trademarks 10 475 ( 6 ) 469 — — —

Order backlog 1 55 ( 7 ) 48 — — —

Total intangible assets $ 6,250 $ ( 112 ) $ 6,138 $ 500 $ — $ 500

Net carrying value of intangible assets attributable to the Remsdaq acquisition was $ 5.6 million at September 30, 2025, consisting of customer relationships, technologies, trademarks and order backlog.

The amortization expense for all amortized intangible assets was $ 0.1 million in Fiscal 2025.

In addition, we had a technology intangible asset of $ 0.5 million associated with an intellectual property acquired in December 2023, which has not yet been subject to amortization.

As of September 30, 2025, the estimated future amortization expense of intangible assets is as follows (in thousands):

Year Ending September 30:

Thereafter 1,494

Total $ 6,138

Long-Term Debt

11 unchanged sentences

that added and amended certain terms related to the replacement of the BSBY as a benchmark rate with the Secured Overnight Financing Rate (SOFR) as administered by the Federal Reserve Bank of New York.

On September 30, 2025, we entered into a fourth amendment to the U.S.

Revolver associated with a reorganization of holding companies of our foreign subsidiaries, replacing the prior share pledge on 65 % of the equity interests of Powell Industries International, B.V., with the share pledge on 65 % of the equity interests of Powell Industries International Limited.

As of September 30, 2025, there were no amounts borrowed under the U.S.

2 unchanged sentences

Revolver as of September 30, 2025.

As of September 30, 2024, we are required to maintain certain financial covenants, the most significant of which are a consolidated net leverage ratio less than 3.0 to 1.0 and a consolidated interest coverage ratio of greater than 3.0 to 1.0.

As of September 30, 2025, we are required to maintain certain financial covenants, the most significant of which are a consolidated net leverage ratio of less than 3.0 to 1.0 and a consolidated interest coverage ratio of greater than 3.0 to 1.0.

Our most restrictive covenant, the consolidated net leverage ratio, is the ratio of earnings before interest, taxes, depreciation, amortization and stock-based compensation (EBITDAS) to funded indebtedness.

4 unchanged sentences

Revolver allows the Company to elect that any borrowing under the facility bears an interest rate based on either the base rate or the eurocurrency rate, in each case, plus the applicable rate.

The base rate is generally the highest of (a) the federal funds rate plus 0.50 %, (b) the Bank of America prime rate or (c) the BSBY rate plus 1.00 %.

The BSBY rate will be replaced by the SOFR rate, effective November 20, 2024.

The base rate is generally the highest of (a) the federal

funds rate plus 0.50 %, (b) the Bank of America prime rate or (c) the SOFR rate plus 1.00 %.

The applicable rate is generally a range from 0 % to 2 % depending on the type of loan and the Company’s consolidated net leverage ratio.

5 unchanged sentences

Revolver may be accelerated and may become immediately due and payable.

Industrial Development Revenue Bonds

We borrowed $ 8.0 million in October 2001 through a loan agreement funded with proceeds from tax-exempt industrial development revenue bonds (Bonds) for the completion of our Northlake, Illinois facility.

The Bonds matured on October 1, 2021, and our final payment of $ 0.4 million was made upon maturity.

Commitments and Contingencies

34 unchanged sentences

( 4,868 ) ( 7,474 ) ( 7,847 )

Total income tax provision (benefit) $ 46,240 $ 14,425 $ ( 3,894 )

Total income tax provision $ 52,803 $ 46,240 $ 14,425

Income before income taxes was as follows (in thousands):

13 unchanged sentences

Valuation allowance — — ( 3 )

Deferred tax rate differential — — ( 1 )

Non-deductible expenses 2 1 1

3 unchanged sentences

Effective rate 23 % 24 % 21 %

Our income tax provision reflects an effective tax rate on pre-tax results of 24 % in Fiscal 2024 compared to 21 % and negative 40 % in Fiscal 2023 and 2022, respectively.

The income tax provision for Fiscal 2024 was favorably impacted by the current year estimated Research and Development (R&D) Tax Credit and benefits related to the vesting of restricted stock units.

Our income tax provision reflects an effective tax rate on pre-tax results of 23 % in Fiscal 2025 compared to 24 % and 21 % in Fiscal 2024 and 2023, respectively.

The income tax provision for Fiscal 2025 was favorably impacted by benefits related to the vesting of restricted stock units and the current year estimated Research and Development (R&D) Tax Credit.

These items were offset by state income tax expense and the tax expense related to certain nondeductible expenses.

The income tax provision for Fiscal 2024 was favorably impacted by the estimated R&D Tax Credit and benefits related to the vesting of restricted stock units.

These items were offset by state income tax expense, the tax expense related to certain nondeductible expenses and an income inclusion related to U.S.

3 unchanged sentences

global intangible income.

The income tax benefit for Fiscal 2022 was largely a result of the reversal of a valuation allowance on the Canadian deferred tax assets that were previously fully reserved, in addition to the estimated R&D Tax Credit.

These items were partially offset by the tax expense related to certain nondeductible expenses, the gain on the disposition of a small, non-core division of our Canadian operations and an income inclusion related to U.S.

global intangible income.

We record and maintain valuation allowances against the deferred tax assets of various foreign jurisdictions until sufficient evidence is available to demonstrate that it is more likely than not that the net deferred tax assets will be recognized.

3 unchanged sentences

The release of the valuation allowance resulted in a $ 0.5 million tax benefit and a corresponding increase in the deferred tax assets.

During the period ended September 30, 2023, management determined that there was sufficient positive evidence to conclude that the U.K.

net deferred tax assets of $ 1.9 million were realizable.

This determination was based on operating results over the past three years and anticipated future taxable income from our U.K.

The valuation allowance was released accordingly, and a $ 1.9 million tax benefit and corresponding increase in the deferred tax assets were recorded.

Likewise, during the period ended June 30, 2022, management concluded that Canadian net deferred tax assets of $ 5.9 million were realizable based on current and anticipated market conditions, continued market diversification, operating results over the past three years and anticipated future taxable income from our Canadian operations.

The release of the Canadian valuation allowance resulted in a $ 5.9 million tax benefit and a corresponding increase in the deferred tax assets.

We have not recorded deferred income taxes on $ 53.7 million of undistributed earnings of our foreign subsidiaries because of management’s intent to indefinitely reinvest such earnings.

5 unchanged sentences

Canada 2018 – 2024, U.K.

2024 and U.S.

federal and state 2021 – 2024.

5 unchanged sentences

Research and experimental expenditures $ 18,406 $ 12,552

$ 12,552 $ 8,118

Long-term contracts 6,801 7,480

1 unchanged sentence

Uniform capitalization and inventory 2,016 1,511

Credit carryforwards 1,304 1,378

Warranty accrual 1,447 1,304

Stock-based compensation 1,367 1,269

Net operating loss 1,248 7,432

Reserve for accrued employee benefits 1,189 1,029

Net operating loss 1,086 1,248

Credit carryforwards 797 1,304

Other 671 655

2 unchanged sentences

Depreciation and amortization $ ( 5,687 ) $ ( 3,773 )

$ ( 3,773 ) $ ( 3,545 )

Retention and other ( 1,597 ) ( 1,310 )

2 unchanged sentences

Net deferred tax asset $ 28,143 $ 24,538

(1) Certain prior year amounts have been reclassified for consistency with the current year presentation.

We have deferred tax assets related to international net operating loss carryforwards of $ 0.2 million that are not reserved with a valuation allowance available to offset future tax liabilities in the respective jurisdictions.

The majority of these net operating loss carryforwards are related to our Canadian operations and expire beginning in 2035.

The remaining unreserved net operating loss carryforwards related to other jurisdictions have an indefinite carryforward period.

The majority of these net operating loss carryforwards are related to our U.K.

operations and have an indefinite carryforward period.

As of September 30, 2025, the majority of our tax credit carryforwards are fully reserved with a valuation allowance.

The net decrease in the total valuation allowance during the year was $ 0.4 million, which was largely a result of the reversal of the Canadian valuation allowance on certain tax credits.

The net increase in the total valuation allowance during the year was less than $ 0.1 million, which was largely a result of the net operating losses generated in foreign jurisdictions.

In assessing the realizability of net deferred tax assets, we consider whether it is more likely than not that some portion or all of the net deferred tax assets may not be realized.

10 unchanged sentences

Included in the balance of unrecognized tax benefits at the end of Fiscal 2025, 2024, and 2023 are $ 1.9 million, $ 1.5 million, and $ 1.6 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate.

Our policy is to recognize

interest and penalties related to income tax matters as tax expense.

Our policy is to recognize interest and penalties related to income tax matters as tax expense.

The amount of interest and penalty expense recorded for the year ended September 30, 2025 was not material.

19 unchanged sentences

The plan is not qualified under Section 401 of the Internal Revenue Code.

We recorded net compensation expense adjustments of $ 0.2 million related to this plan in Fiscal 2024 and $ 0.8 million in Fiscal 2023.

We recorded net compensation expense adjustments of $ 0.2 million related to this plan in both Fiscal 2025 and Fiscal 2024.

At September 30, 2025, total assets held in the Rabbi Trust were $ 13.9 million and recorded in other assets and the liability was $ 13.7 million and recorded in deferred compensation in our Consolidated Balance Sheets.

17 unchanged sentences

In accordance with the 2014 Plan, the Compensation and Human Capital Committee has authorized grants of RSUs to certain officers and key employees of the Company.

The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market on the grant dates.

The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market during a specified period prior to the grant dates.

Typically, these grants vest over a three-year period from the date of issuance and are a blend of time-based and performance-based shares.

Fifty percent of the grant is time-based and vests over a three-year period on each anniversary of the grant date, based on continued employment.

Fifty percent of the grant is time-based and typically vests over a three-year period on each anniversary of the grant date, based on continued employment.

The remaining fifty percent of the grant is earned based on the three-year earnings and safety performance of the Company following the grant date.

16 unchanged sentences

In December 2023, the Company’s Compensation and Human Capital Committee revised the non-employee directors' annual restricted stock compensation from a fixed-shares arrangement to a fixed-value arrangement, retrospectively effective on October 1, 2023.

Prior to October 1, 2023, each non-employee director received 2,400 restricted shares of the Company’s common stock annually.

to October 1, 2023, each non-employee director received 2,400 restricted shares of the Company’s common stock annually.

Fifty percent of the restricted stock granted to each of our non-employee directors was vested immediately, while the remaining fifty percent vested on the anniversary of the grant date.

4 unchanged sentences

Under this 2014 Director Plan, in February 2025, 3,500 shares of restricted stock were issued to our non-employee directors at a price of $ 200.02 per share.

In August 2025, an additional 230 shares of restricted stock were issued to one of our non-employee directors at a price of $ 222.25 per share.

In February 2024, we issued 4,620 shares of restricted stock to our non-employee directors at a price of $ 153.81 per share.

The total number of shares of common stock available for future awards under the 2014 Director plan

was 185,980 shares as of September 30, 2024.

The total number of shares of common stock available for future awards under the 2014 Director plan was 182,250 shares as of September 30, 2025.

At September 30, 2025 and 2024, there were 3,730 shares and 4,620 shares, respectively, of unvested restricted stock outstanding.

16 unchanged sentences

Level 3 — Unobservable inputs that are supported by little or no market data and require the reporting entity to develop its own assumptions.

Recurring Fair Value Measurements

The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025 (in thousands):

10 unchanged sentences

Deferred compensation — 13,707 — 13,707

Contingent future payments related to the acquisition of Remsdaq — — 2,344 2,344

The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2024 (in thousands):

19 unchanged sentences

Because the deferred compensation liability is intended to offset the plan assets, it is also categorized as Level 2 in the fair value measurement hierarchy.

Contingent future payments related to the acquisition of Remsdaq – The contingent future payments were calculated using a probability outcome model based on internally developed assumptions;

accordingly, they are categorized as Level 3 in the fair value measurement hierarchy.

There were no transfers between levels within the fair value measurement hierarchy during the year ended September 30, 2025.

Non-recurring Fair Value Measurements

We had non-recurring fair value measurements associated with our acquisition of Remsdaq, see Note P.

Business Acquisition, for additional information on non-recurring fair value measurements.

Our leases consist primarily of office space and construction equipment.

12 unchanged sentences

Leases with initial terms of twelve months or less are not recorded in our Consolidated Balance Sheets.

The following table provides a summary of the operating lease assets and

operating lease liabilities included in our Consolidated Balance Sheets as of September 30, 2024 and 2023, respectively (in thousands):

The following table provides a summary of the operating lease assets and operating lease liabilities included in our Consolidated Balance Sheets as of September 30, 2025 and 2024, respectively (in thousands):

September 30,

12 unchanged sentences

Segment Information

We manage our business as one reportable operating segment related to the development, design, manufacturing and servicing of custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy.

We manage our business as one reportable, operating segment and our revenues are primarily generated from the development, design, manufacturing and servicing of custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy.

Our chief operating decision maker (“CODM”) is our chief executive officer.

The CODM manages and allocates resources on a total consolidated basis by assessing performance of revenues and earnings before interest and taxes (“EBIT”) using actual-to-actual, actual-to-plan and actual-to-forecast variance analysis.

The measure of segment profit and loss regularly provided to the CODM that is most consistent with GAAP is consolidated net income, as presented in our Consolidated Statements of Operations.

The CODM does not manage cost components by product, customer type or service type, nor does the CODM regularly receive disaggregated information at this level.

For the years ended September 30, 2025, 2024 and 2023, the summary of segment net income, including segment expenses, for our single reportable segment were as follows (in thousands):

Year Ended September 30,

2025 2024 2023

Revenues $ 1,104,318 $ 1,012,356 $ 699,308

Segment operating expenses:

Cost of goods sold 779,937 739,268 551,755

General and administrative expenses 65,569 57,037 52,819

Sales and marketing expenses 29,551 27,063 25,642

Research and development expenses 11,008 9,427 6,220

Other expense (1)

Total segment operating expenses 886,458 833,583 636,788

Operating income / EBIT 217,860 178,773 62,520

Interest income, net ( 15,690 ) ( 17,315 ) ( 6,430 )

Income tax provision 52,803 46,240 14,425

Segment net income $ 180,747 $ 149,848 $ 54,525

Gross profit 324,381 273,088 147,553

(1) Other expense includes realized currency loss of $ 0.3 million, $ 0.8 million, and $ 0.4 million, respectively.

Revenues by country represent sales to unaffiliated customers as determined by the ultimate destination of our products and services, summarized for the last three fiscal years by region in the table below (in thousands):

3 unchanged sentences

Canada 157,191 106,521 84,090

Europe 31,388 26,699 17,699

Middle East and Africa 27,440 13,440 14,998

Mexico, Central and South America 7,631 9,399 3,095

Europe 25,072 31,388 26,699

Asia/Pacific 9,283 6,850 6,188

Mexico, Central and South America 5,110 7,631 9,399

Total revenues $ 1,104,318 $ 1,012,356 $ 699,308

9 unchanged sentences

2025 Quarters

Second Third Fourth (2)

Revenues $ 241,431 $ 278,631 $ 286,273 $ 297,983 $ 1,104,318

5 unchanged sentences

(1) The results for the first quarter of Fiscal 2025 demonstrated normal seasonality and were negatively impacted by holidays and work schedules compared to other quarterly periods.

(2) The results for the second quarter of Fiscal 2025 were positively impacted by project cancellations of $ 1.8 million.

(3) The results for the third quarter of Fiscal 2025 were positively impacted by project cancellations of $ 2.3 million.

(4) The results for the fourth quarter of Fiscal 2025 were positively impacted by project cancellations of $ 0.5 million.

2024 Quarters

Second Third Fourth (2)

Revenues $ 194,017 $ 255,108 $ 288,168 $ 275,063 $ 1,012,356

5 unchanged sentences

(1) The results for the first quarter of Fiscal 2024 demonstrated normal seasonality and were negatively impacted by holidays and work schedules compared to other quarterly periods.

(2) The results for the second quarter of Fiscal 2023 were positively impacted by a project cancellation of $ 1.6 million.

(3) The results for the third quarter of Fiscal 2023 were positively impacted by a project cancellation of $ 1.7 million.

(4) The results for the fourth quarter of Fiscal 2023 were positively impacted by project cancellations of $ 1.0 million and the reversal of a $ 1.9 million valuation allowance against the U.K.

net deferred tax assets.

(2) The results for the fourth quarter of Fiscal 2024 were positively impacted by project cancellations of $ 2.2 million.

The sum of the individual earnings per share amounts may not agree with year-to-date earnings per share as each period’s computation is based on the weighted-average number of shares outstanding during the period.

On June 30, 2022, we sold a non-core, industrial valve repair and servicing business within our Canadian operations and received proceeds of $ 4.3 million.

We recorded a $ 2.0 million pre-tax gain on this transaction, which has been presented in other income on our Consolidated Statement of Operations for the year ended September 30, 2022.

Business Acquisition

On August 15, 2025, Powell UK Limited, a fully owned subsidiary of Powell Industries, Inc.

completed the previously announced business acquisition of all outstanding equity interests in Remsdaq, a U.K.-based manufacturer of SCADA RTUs for electrical substation control and automation in generation, transmission and distribution, for a total consideration of $ 18.4 million including cash acquired of $ 4.6 million.

Cash payment of $ 15.2 million, including cash acquired of $ 4.6 million, was made on the acquisition date and deferred payments of $ 3.2 million are contingent upon Remsdaq meeting certain technical and financial milestones.

We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of August 15, 2025.

In September 2025, Remsdaq achieved its financial milestone and accordingly, we made cash payments of $ 0.9 million and reduced the fair value of the deferred payments to $ 2.3 million.

We incurred total acquisition-related costs of approximately $ 1.4 million, including legal, accounting, valuation, and other professional fees.

These costs were expensed as incurred and included within Selling, General and Administrative Expenses in the Consolidated Statements of Operations.

The aggregate purchase price allocation at the acquisition date was as follows (in thousands):

Purchase Price Allocation

Fair value of assets acquired

Cash and cash equivalents $ 4,565

Receivables 1,095

Inventory 2,176

Intangible assets 5,773

Goodwill 5,143

All other assets 3,644

Total assets recognized 22,396

Fair value of liabilities assumed

Liabilities assumed ( 2,542 )

Deferred tax liabilities associated with intangible assets recognized related to acquisition ( 1,443 )

Fair value of net assets $ 18,411

Purchase Consideration

Cash consideration $ 15,175

Fair value of contingent consideration 3,236

Total purchase consideration $ 18,411

The fair value of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize the valuation of net assets acquired.

Goodwill is non-deductible for income tax purposes and calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Remsdaq.

Other intangible assets of approximately $ 5.8 million include customer relationships, technology, trademarks and order backlog, as follows (in thousands) at the acquisition date:

Intangible Assets Identified Fair Value Useful Life

Customer relationships $ 2,211 12

Technology 3,030 5

Trademarks 477 10

Order backlog 55 1

Total $ 5,773

We engaged an independent third-party valuation specialist to assist with the fair value measurement of the intangible assets assumed through the acquisition of Remsdaq, and the calculation of goodwill.

The intangible assets were valued using the income approach, specifically the multi-period excess earnings method and the relief from royalty method.

The inputs include forecasted future revenues, future margins, and revenues attributable to existing customers, obsolescence factor, royalty rate, customer attrition rate, contributory asset charges and discount rates, which are unobservable inputs that are based on our own and Remsdaq’s assumptions.

Accordingly, the fair values of goodwill and other intangible assets are considered level 3 measurements under the U.S.

GAAP fair value hierarchy.

The purchase price includes up to $ 3.2 million in contingent consideration, of which approximately $ 0.9 million has been earned and paid in September 2025 after Remsdaq achieved its financial target.

The remaining contingent consideration was calculated based on a probability outcome model to measure the fair value of the contingent consideration, which is considered a Level 3 measurement under the U.S.

GAAP fair value measurement hierarchy.

As of September 30, 2025, we determined the fair value of the contingent consideration was $ 2.3 million.

Subsequent Event

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data